Court of Appeal decision highlights dangers of choosing non-exclusive jurisdiction clause in favour of an EU court

The Court of Appeal has held that the English court had no power under Article 33 of the recast Brussels Regulation to stay in favour of prior proceedings commenced in New Jersey, where the English court had jurisdiction under a non-exclusive jurisdiction clause. It made no difference that, absent the clause, the court would have had jurisdiction based on the defendant’s domicile: Perform Content Services Ltd v Ness Global Services Ltd [2021] EWCA Civ 981.

This decision will be of interest to financial institutions because of its implications for non-exclusive jurisdiction clauses in favour of EU member state courts.

For proceedings commenced since 1 January 2021, the recast Brussels Regulation will not apply in the UK. However, the Regulation will be applied by any EU member state court asked to exercise its discretion under Article 33 to stay its proceedings in favour of prior proceedings in England as a “third State” (ie a non-EU country).

If the English court’s approach in this case is followed in the EU, it means an EU court would have no power to stay its proceedings in favour of (prior) English proceedings where there is a non-exclusive jurisdiction clause in favour of an EU court. This is so regardless of whether England is a more appropriate jurisdiction in which to decide the dispute, and regardless of the fact that commencing proceedings in the English court was not a breach of the jurisdiction clause.

For a more detailed discussion of the decision, see our litigation blog post.